Mike Landfair

Martha Stewart Living: More Of The Story

Martha Stewart's legal troubles really hurt!

Susan Dickinson writes today that the head of Martha Stewart Living stepped down. 

Susan Lyne has stepped down from her posts as president and CEO of Martha Stewart Living Omnimedia, Inc. The company announced it will promote President of Media Wenda Harris Millard and President of Merchandising Robin Marino to the positions of Co-CEO, reporting to Charles Koppelman, Chairman of the Board. 

Lyne said, "Four years ago when the Board asked me to take on this role, our principal goal was to rebuild the company and return it to profitability. We have done that. In the process we've launched some great new businesses, built an impressive management team and re-affirmed the enduring power of the Martha Stewart brand. 

But there’s more to the story, according to Bloomberg today.  Sarah Rabil writes "Susan Lyne stepped down after attempting a turnaround that failed to revive the company's shares following Stewart's conviction for obstruction of justice."

``Much of the value destruction in the stock price was really not a result of anything Susan Lyne failed to do,'' said RBC Capital Markets analyst David Bank in New York. ``They had a real challenge in light of Martha Stewart's legal troubles.'' He also cited a slumping U.S. economy and advertising market. 

The slumping economy may have caused the demise of Blueprint magazine. In April, Martha Stewart Living forecast ad sales will rise by a ``mid-single digits'' percentage in the second quarter. 

No wonder the stock is down! (See Chart)

Posted by Mike Landfair on June 11, 2008 | Comments (0)